Both are safe, fixed-interest savings products — but they solve different problems. An FD grows a lump sum you already have; an RD builds a habit out of money you'll save month by month.
How a fixed deposit works
You deposit a lump sum — say a bonus or matured savings — for a fixed tenure at a fixed rate. Interest compounds (usually quarterly) on the entire amount from day one, which is the FD's structural advantage: all your money earns for the full term. Early withdrawal is possible but costs a rate penalty.
How a recurring deposit works
You commit a fixed amount every month — ₹5,000, say — for a chosen tenure. Each instalment earns interest from the month it's deposited, so your first instalment earns for the full term but your last earns for only one month. The effective return is therefore lower than an FD at the same rate — the price of not needing the lump sum upfront.
Run both calculators with your amounts and see the maturity values side by side.
Open FD CalculatorWhich one is for you?
| Your situation | Better fit |
|---|---|
| You have a lump sum sitting idle | FD |
| You want to save from a monthly salary | RD |
| Saving for a goal 1–3 years away | RD (builds the amount) |
| Parking an emergency fund | FD (laddered — see below) |
Three tactics worth knowing
- Ladder your FDs. Split a lump sum into several FDs with staggered maturities (6, 12, 18, 24 months). You keep earning full rates while always having one maturing soon if you need cash without penalty.
- Convert an RD at maturity. When an RD matures, roll the lump sum into an FD — the money keeps compounding at the higher-efficiency structure.
- Compare compounding frequency, not just rate. 7% compounded quarterly beats 7.05% compounded yearly. The FD calculator lets you switch frequency and see the difference.
Run your own numbers
Use the FD Calculator and RD Calculator with your actual amounts and current bank rates — both run in your browser and show maturity value, interest earned and effective growth. Planning a loan instead of savings? Read how EMI works first.
General information, not financial advice — confirm rates and tax treatment with your bank.